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Wednesday 22 December 2010

10-281MR ASIC has commenced Storm legal proceedings

ASIC today confirmed it has lodged with relevant courts legal proceedings that it announced on 26 November 2010 (refer 10-250MR). These proceedings arise out of its investigation into the collapse of Storm Financial Limited (In Liquidation) (Receivers and Managers Appointed) (Storm).

Since announcing its decision to commence compensation proceedings, ASIC has continued confidential commercial discussions with some key parties, however, these have not resulted in an acceptable commercial resolution on compensation.

ASIC’s Chairman Tony D’Aloisio said, ‘ASIC is bringing these actions to seek compensation for investors who have suffered losses. ASIC has maintained that a commercial resolution is the preferred approach. Unfortunately discussions did not result in a satisfactory outcome and it has been necessary for ASIC to bring these proceedings.'

The legal proceedings are:

  • compensation proceedings in the Federal Court of Australia in ASIC’s name and on behalf of two former Storm investors against Bank of Queensland Limited (BoQ), the owner and franchisee of the BoQ’s North Ward branch (Senrac Pty Limited) and Macquarie Bank Limited (MBL) in relation to alleged breach of contract, 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; and
  • proceedings in the Federal Court of Australia against Storm, Commonwealth Bank of Australia, BoQ and MBL based on the operation by Storm of an alleged unregistered managed investment scheme in which the banks were involved.

In addition, as foreshadowed ASIC has filed civil penalty proceedings in the Federal Court of Australia against Emmanuel and Julie Cassimatis as directors of Storm in relation to alleged contraventions of section 180 (duties of directors) of the Corporations Act.

ASIC’s investigations into the collapse of Storm continue.

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Last updated: 22/12/2010 12:00