Deficiencies in a statement of claim made by victims of the Storm Financial collapse, have seen their allegations of misfeasance and negligence against the Australian Securities and Investments Commission (ASIC) dismissed by the Federal Court of Australia.
The victims claimed that ASIC was aware of the risks posed by Storm's advice model, and breached its duty of care by failing "to do certain things to disclose, address, minimise or avoid", in a further amended statement of claim (FASOC), the firm's collapse.
In a 277 point judgment, Federal Court Justice, Jacqueline Gleeson, said the statement of claim was "so deficient" it was liable to be struck out in its entirety.
"To the extent that it is alleged that ASIC should have imposed a licence condition upon Storm, the FASOC is deficient in that it does not allege that, had the relevant licence condition been imposed, the plaintiffs would not have suffered financial loss," Justice Gleeson said.
"The plaintiffs have had ample opportunity to plead a reasonable cause of action. The first directions hearing in this action was held on 4 February 2015.
"At that directions hearing the plaintiffs sought an adjournment of three months, with no directions to progress the action. The adjournment was sought because the plaintiffs had made an application under the Freedom of Information Act 1982 (Cth).
"Over ASIC's opposition the plaintiffs were granted the three month adjournment on the basis that, in that three month period, the statement of claim would be put into the form which constituted the plaintiffs' ‘final effort', to which they were ‘committed'.
"There is no reason to believe that the plaintiffs are able to plead additional facts that would support a reasonable cause of action. Accordingly, I will not grant leave to the plaintiffs to file a second further amended statement of claim."
Comments
Does anyone know if the FOI request was provided to the plantiff?
Well done Levitt Robinson, bleed all the ex-storm clients for as much money as you can and make promises you don't keep and when you can't get any more money from them give up. ASIC should investigate Stewart Levitt.
While I don't like the plethora of ambulance chasing solicitor firms that have sprung up in our sector post GFC, we did assist a number of Storm victims and prior to the GFC, ASIC did a compliance check and gave Storm a clean bill of health. Likewise, when the proverbial hit the fan, in a knee jerk reaction ASIC sought damages for clients but this actually has since hampered those same clients from gaining further and more adequate compensation.
Bit like a doctor misdiagnosing and giving the all clear, then panicking rushing into surgery when later results show malignancy, but then proceeding to chop off the wrong testicle... But hey, let's absolve them for any incompetence.
My understanding is that there are a number of ex-Storm FP's still in our industry, and most of the ex-Storm FP's (active or not) haven't suffered as much financial ruin as they wrought on their victims, um I mean 'clients'. The big K still lives in a mansion with an opulent lifestyle and isn't behind bars either. Surely, if nothing else that shows ASIC are not capable - and interestingly rather than pursuing this with all resources, are content to make the lives of every other professional in our industry more onerous, and push political agendas surprisingly in line with the ISA...
And if I sound bitter, having dealt first hand with multitudes of Storm victims, average Australian's lives ruined irrevocably with utterly hopeless handling from ASIC, you are damn right I am. I can't blame them for grasping at any straw to help make it right.
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