The former chief executive of Storm Financial has accused the corporate regulator and Commonwealth Bank of teaming up to perpetuate a “blame Storm message”.
In a submission to the Senate inquiry into ASIC, former Storm boss Emmanuel Cassimatis laid out the reasons behind the collapse of the financial planning group, placing blame squarely at the feet of those beyond Storm management.
While Mr Cassimatis says he “regret[s] the complete loss of Storm clients” as well as his own personal “financial ruin”, he argues the collapse may have been avoidable if it weren’t were a “lack of co-operation by both the CBA and ASIC in providing all of the facts relating to their involvement”.
The former CEO alleges that the demise of Storm Financial was a “textbook example” of “manipulation by ASIC of evidence to facilitate predetermined outcomes” and that the corporate regulator refused to accept evidence of “wrongdoing” by CBA in the form of a “systemic product data defect with margin loan records” that assisted Storm’s entry into administration.
“A decision was taken at the highest levels within the CBA to cover their failures rather than admit them,” Mr Cassimatis alleges. “To this end the CBA had to ensure its ‘blame Storm’ message was heard whilst at the same time Storm’s protestations were suppressed. To facilitate this, the CBA required the assistance of ASIC to keep Storm at bay.”
Mr Cassimatis further alleges that Storm advisers presented evidence of “CBA breaches” to the corporate regulator but that “ASIC refused to meet with the Storm advisers to view such evidence”.
In September 2012, CBA announced it had reached a resolution with ASIC in relation to Storm, agreeing to a $136 million settlement for CBA customers “who invested through Storm”.
“We are pleased to have reached an agreement with ASIC on this matter as it is in the best interests of our customers to avoid lengthy and uncertain litigation,” said CBA group general counsel David Cohen at the time.
“This result delivers certainty to our customers who might otherwise have faced further years of delay before any final litigation result would have been known.”
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