The Australian Securities and Investments Commission (ASIC) has announced its intention to bring civil penalty proceedings against the principals of Storm Financial, Emmanuel and Julie Cassimatis.
The regulator also announced it will begin legal proceedings against parties including the Commonwealth Bank of Australia, Bank of Queensland and Macquarie Bank Limited, seeking compensation for investors arising out of the collapse of Storm.
ASIC said the compensation proceedings would not be filed immediately in order to allow a short further period of no more than three weeks for commercial resolution discussions to continue.
Commenting on the move, ASIC chairman Tony D’Aloisio said the regulator had not been able to reach an acceptable resolution with key parties on compensation that it could then recommend to investors.
“In the circumstances, it was not possible for ASIC to continue to defer the decision to commence legal proceedings,” he said. “However ASIC remains of the view that a commercial resolution is the preferable course.
Referring to the action against the Cassimatises, the regulator said it would be alleged they had breached their duty as directors by causing and permitting Storm to be exposed to legal liability arising from the implementation of a financial services business model, which involved providing commoditised financial advice to investors that failed to take into account the personal circumstances of individual investors.
ASIC said the relief being sought would include orders that the defendants each pay substantial pecuniary penalties which could be imposed in respect of each breach of duty, and that they be disqualified from managing corporations and be retrained from providing financial services.
