Storm pair face costs of court actions

STORM Financial founders Emmanuel and Julie Cassimatis face legal costs understood to run into millions of dollars fighting charges against them.

Last week the Federal Court ruled on penalties of $ 70,000 fines each and bans on managing companies for seven years after the court previously found they had breached their duties as directors.

On Thursday the court confirmed those penalties and ordered the Cassimatises pay certain costs of the regulator, the Australian Securities and Investments Commission, and that ASIC pay certain costs of the Cassimatises.

The case has dragged on for eight years.

The collapse of the former Townsville- based financial planner had a devastating impact on its investors.

Some 3000 clients lost what ASIC estimated to be $ 830 million in equity from late 2008 although the portfolios of investors including borrowings amounted to more than $ 3 billion.

The investors were highly leveraged and were wiped out as the stockmarket plunged.

Some of the investors upon which ASIC’s case relied lost their family home.

In 2016 Justice James Edelman found that by failing to give reasonable consideration to the circumstances of these investors that Storm provided inappropriate advice which exposed them to devastating consequences.

Shortly before the global financial crisis in 2008, Storm’s annual revenue was $ 77 million and it held $ 120 million consolidated gross assets.

In early 2009 Storm went into administration and then liquidation.