Summary of ASIC actions

Civil penalty proceedings against the Cassimatises

On 21 December 2010 ASIC filed proceedings in the Federal Court of Australia against Emmanuel Cassimatis and Julie Cassimatis alleging that they breached their duty as directors of Storm Financial Limited (In Liquidation) (Receivers and Managers Appointed) (Storm) by causing and permitting Storm to be exposed to legal liability arising from the implementation of a financial services business model (Storm Model) which involved providing commoditised financial advice to investors that failed to take into account the personal circumstances of individual investors

ASIC was successful in the proceeding with the Federal Court finding that the directors had breached their duties as directors and that Storm had provided inappropriate advice to certain investors.  The relief sought by ASIC in these proceedings includes orders that Mr Cassimatis and Mrs Cassimatis each pay substantial pecuniary penalties, and that they be disqualified from managing corporations and be restrained from providing financial services. More

Compensation proceedings against Bank of Queensland Limited, Senrac Pty Limited and Macquarie Bank Limited

On 22 December 2010 ASIC filed proceedings in the Federal Court of Australia against Bank of Queensland (BoQ), the owner and franchisee of the BoQ's North Ward branch (Senrac Pty Limited (Senrac)) and Macquarie Bank Limited (MBL). These proceedings are brought by ASIC in its own name and on behalf of two former Storm investors. In these proceedings ASIC is alleging causes of action against BoQ and MBL based on:

  • breach of contract (breach of Banking Codes of Practice);
  • contravention of the statutory prohibitions against unconscionable conduct; and
  • liability as linked credit providers of Storm under section 73 of the Trade Practices Act 1974

The case against Senrac is based on its involvement in BoQ’s alleged contraventions.

The relief sought by ASIC in these proceedings includes declarations of unconscionable conduct, statutory and common law damages and compensation orders, and orders setting aside various loan transactions and securities. More

Proceedings against Commonwealth Bank of Australia Limited, Bank of Queensland Limited and Macquarie Bank Limited – unregistered managed investment scheme

On 22 December 2010 ASIC filed proceedings in the Federal Court of Australia alleging that the conduct of the Storm Model amounted to the operation of a managed investment scheme that was required to be registered under the Corporations Act and was not registered. In these proceedings ASIC is alleging that Storm operated the managed investment scheme and that the Commonwealth Bank of Australia Limited (CBA), Bank of Queensland Limited (BoQ) and Macquarie Bank Limited(MBL) were knowingly concerned in the operation of that managed investment scheme.

ASIC is adopting a staged approach to proceedings in relation to the alleged scheme. The relief sought by ASIC in the first instance include declarations as to the operation of the managed investment scheme by Storm and that each of CBA, BoQ and MBL were knowingly concerned in its operation. If successful, ASIC is likely thereafter to seek orders for the payment of compensation to investors. More
 

$2 million payment to Emmanuel Cassimatis & Associates Pty Ltd

On 30 January 2009, ASIC obtained orders from the Supreme Court of Queensland freezing a payment of $2 million from Storm to a bank account held by Emmanuel Cassimatis & Associates Pty Ltd. Emmanuel and Julie Cassimatis are both directors and shareholders of Emmanuel Cassimatis & Associates Pty Ltd.

The Court orders, which were subsequently extended, restrained Emmanuel Cassimatis, Julie Cassimatis and Emmanuel Cassimatis & Associates Pty Ltd from paying, transferring or otherwise dealing in any way with the money. The amount of $2 million was transferred from a bank account of Storm on 15 December 2008, within one month of the appointment of voluntary administrators to the company. ASIC was concerned that, on the information available to it, there did not seem to be a proper basis for the payment.

The receivers and managers of Storm successfully applied to the Court to take over these proceedings on 20 March 2009. The proceedings were subsequently resolved by consent with orders made for the $2m to be paid to receivers and managers on behalf of Storm Financial.

ASIC contact with former Storm investors

As part of this investigation, ASIC has been interviewing former Storm investors.

ASIC has been helping former Storm investors experiencing financial distress who have contacted our Infoline service by providing information to them directly.

While the details of any ASIC investigation must remain confidential, ASIC will continue to keep former Storm investors and other interested parties informed as far as possible.

ASIC investigation background

Last updated: 28/10/2016 10:54