A former executive with Storm Financial (Storm) has claimed ASIC tried to place an enforceable undertaking on the failed advisory firm in December last year.
Former director of Storm Financial’s Cairns office, Gus Dalle Cort, told InvestorDaily on Monday that ASIC had handed Storm founders Emmanuel and Julie Cassimatis an enforceable undertaking against their company.
Dalle Cort also confirmed that despite the corporate regulator’s refusal to confirm Storm advisers were gagged in December 2008, a banning order was given.
“In early or the middle of December, ASIC presented to the Cassimatis an enforceable undertaking which basically stated ‘you cannot talk to your clients for 12 months’,” Dalle Cort said.
“Now, essentially, ASIC has still denied Storm had tried to be gagged. When that document was presented, it was ‘if you don’t sign this, then the full force of ASIC will come down on your head’.
“And at the same time, when we were getting a gun pointed at our head and me as an adviser and all the other advisers were being told ‘you can’t talk to your clients’ you’ve got this machine at Commonwealth Bank of Australia (CBA) saying ‘talk to your financial adviser’.”
In another claim, Dalle Cort said CBA trained their back office staff to direct all Colonial Geared Investment/Storm related inquiries regarding margin lending back to the Storm advisers, even during the time when Storm advisers were barred from communicating with their clients.
He has also claimed that CBA were determined to shut down Storm.
“[Storm’s] own margin lending account went into negative equity to the tune of $1.8 million. CBA used that disputed default to call in Storm’s corporate facilities, with 24 hours to pay,” Dalle Cort said.
“Had Storm’s margin loans never gone into negative equity they would never have called the loans, and creditors now miss out because they put Storm into liquidation.”
While CBA declined to comment on much of Dalle Cort’s claims, a CBA spokesperson said the bank has always maintained that Storm had been the provider of financial advice to their clients.
“The bank has said on a number of occasions that the provider of financial advice was Storm Financial and Storm Financial maintained the relationship with their clients at their instruction,” the statement said.
ASIC were unavailable for comment.
