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.”
Would the Storm client offering have passed the “Mum” test?
Mannie, would you, Julie and the rest of the ex MLC team of advisers have happily placed their respective Mums into such an aggressive gearing strategy ?
We might also ask why ASIC is interfering with a mediated outcome between Macquarie Bank and class action members?
We will see what comes out of a further class action against ASIC for failing to execute its statutory obligations and core business.
ASIC has a lot to answer for in this matter, especially its strategic protection of CBA interests and appalling performance generally.
Kev Rosser – hehe nice try but you not receiving further compensation is hardly noteworthy of an ASIC/CBA conspiracy. what is it with greedy storm investors and their constant chant for more more more? its more likely your version of ‘loss’ is deeply flawed.
IFA – why give air to comments from any Cassimatis? they have proven to be routinely untrustworthy.
Another reason to wonder about ASIC and CBA is the recent “settlement out of court” between ASIC and CBA where people who lost everything and had previously been given 1o cents in the dollar by CBA were to be recompensed to the order of 50 cents in the dollar. In my case I was told that I had lost nothing and was therefore entitled to nothing! ASIC settled out of court with CBA for nothing!! The CBA margin call which I didn’t get resulted in a loss for me of around $800,000 Is that nothing? I had been retired for 6 years at the end of 2008 and had to go back to work to service the mortgage on my house. It required me to relocate 700 km from my house and make my house available for rent. My house was mortgaged through ANZ and they were very sympathetic and helpful to me.
ASIC and CBA did get away with some poor action. Sadly not a reliable witness here to make the point. RESEAU at the same time went down with over $80 million of many peoples hard earned. I remember spending several hours trying to alert ASIC to it well before the collapse. Gave up with the brick wall of incompetence there.
http://www.asic.gov.au/asic/as…
Just as big as Storm and swept under the carpet. There needs to be a conduit for planners and other finance professionals to deal with ASIC. They have an email now but I suspect that this just goes into a pile not followed up.
Mr. Cassimitis you have found out the very hard way that their truly is no honour amongst theives!
Just take your lumps!
Come on Mannie. Your financial ruin? The fees you charged those poor clients for a “one size fits all” product flog…