ASIC has welcomed the Federal Court’s decision to dismiss an application by Storm Financial founders Emmanuel and Julie Cassimatis seeking summary dismissal of ASIC’s case against them.
The decision means ASIC can pursue its civil penalty proceedings alleging the executive directors breached their directors’ duties.
ASIC is seeking to ban the Cassimatises from the financial services industry and disqualify them from managing companies, as well as the payment of pecuniary penalties.
The regulator will now be asking the court to implement a timetable for these proceedings to be progressed to trial.
“Since Storm’s collapse, ASIC has been seeking compensation for investors as well as pursuing regulatory action against those companies and individuals intrinsically involved in implementing the Storm model,” says ASIC deputy chairman Peter Kell.
ASIC secured $1.1 million in compensation on behalf of two former Storm investors, Barry and Deanna Doyle in May this year and has also appealed a recent decision of the Federal Court to approve the settlement between former Storm Financial clients and Macquarie Bank Limited.
ASIC’s challenge is not to the amount of the settlement, rather to the fairness of the settlement distribution among all of the class action members who are entitled to participate in it. This appeal will be heard by the Full Court of the Federal Court in Brisbane on August 5, 2013.
Last year, ASIC and CBA reached an agreement for the bank to provide up to $136 million in compensation for Storm investors who borrowed with the bank.
The Cassimatis matter will return to court for a directions hearing on July 11, 2013, at which time the court will order a timetable to progress the proceedings to trial and also hear argument on the question of costs arising from the court’s decision to dismiss the defendants’ application.