Two weeks ago I stood in the Book Depository in Dallas Texas, a few feet away from where Lee Harvey Oswald fired the fatal shots that killed President John F. Kennedy on 22nd November 1963.
Conspiracy theories have circulated ever since but the preponderance of evidence (about 99%) suggests that LHO acted alone. His claim that he “was just a patsy” was an obvious attempt by him to divert suspicion away from himself.
Why? No one will ever know! He had just committed the crime of the century and yet he was in denial?
The directors of Storm Financial are currently appearing in court to answer for their part in the Storm Financial collapse and the losses that investors incurred as a consequence. They too are claiming that they are patsies because they operated within the framework laid down in the Corporations Act and ASIC were fully aware of what they were doing at all times? They too are in denial.
The Cassimatises, to my mind, represent the worst of human kind. People like this are solely motivated by greed and they are willing to go to any lengths to achieve their goals not matter what the cost to those they inveigle along the way. Therefore, I have little sympathy with anything they say. However, they are right about one thing! They were only able to come up with their grandiose schemes because ASIC had given them the green light. Judge for yourself:
”On 6th November 2007, Storm lodged with ASIC a prospectus for its offer of 160 million shares to the public. The prospectus contained a detailed description of the Storm Business Model, and of the practices and procedures for the production of financial advice to clients.
By an email dated 12th November 2007, ASIC notified Storm that three of its senior officers, namely, Deborah Koromilas, Assistant Director, Financial Services Compliance; Elizabeth Korpi, Lawyer, Capital Markets, Compliance; and Belisa Jong, Manager, Capital Markets, Compliance, would visit Storm’s Sydney office on 13th November 2007, and requested an explanation of Storm’s advice model, including the client education process and documentation provided to clients and an explanation of how Storm’s internal software system interacted with the services Storm provided to clients.
In the course of the meeting, ASIC officers referred to Storms prospectus and asked various questions including an explanation of the advice that Storm gave to its index fund clients. In response Storm presented and communicated to the officers from ASIC (i) the substance of Storm’s advice model; (ii) the substance of Storm’s client education process; (iii) an explanation of how the Storms internal software system interacted with the services Storm provided to clients; (iv) responses to all other matters about which they enquired; and following the meeting on 13th November 2007, ASIC was satisfied that Storm’s prospectus accurately set out the material elements of its business model.
In addition, Ms Koromilas from ASIC, informed Storm that ASIC wished other advisors had procedures and processes that were as good as Storm’s.
When the officers of ASC and ASIC conducted their reviews and audits they had complete access to all of the documents used by Storm in giving financial advice to clients, including practice and procedure manuals, advice templates, cash flow analyses, client financial profiles, Storm’s Financial Services Guide and Statements of Advice. The ASC and ASIC often required individual client files to be ready in advance of their visits.
The ASC and ASIC thereby became familiar with all aspects of Storm’s business relevant to the advice it was giving clients and the processes & procedures within Storm for the production of financial advice to clients, including advice templates, cash flow analyses and client financial profiles. [Quoted from ‘I ACCUSE’]
Neither the ASC nor ASIC informed Storm following any of their reviews or audits that the Storm model contravened or might contravene any of the financial services laws. All of the ASC’s and ASIC’s communications with Storm, following such reviews and audits, were to the effect that “Storm’s conduct was, in general, appropriate and lawful, subject only to minor matters.”
Emmanuel and Julie Cassimatis have repeatedly stated that ASIC frequently reviewed their financial planning business before it collapsed in 2009. In a defence document filed in February 2012, Mr and Mrs Cassimatis said ASIC officials ''visited Storm's premises and conducted reviews and audits on numerous occasions from 1993 to 2008'' without raising concerns. The pair blamed the 2008 global financial crisis and shortcomings by banks that lent to Storm clients.
These events were ''not reasonably foreseeable'', the lawyers acting for them said. The Cassimatises were the sole shareholders of Storm, whose 14,000 clients lost an estimated $3 billion when the value of their highly geared stock market investments plummeted during the GFC. The defence said the pair did not breach their duties as directors ''as they conducted the affairs of a solvent company in good faith and in accordance with the informed wishes of its shareholders - themselves''.
their assertions that ASIC approved of the Cassimatises’ actions are undeniable because the facts speak for themselves.
Despite ASIC’s hypocrisy in this matter, again supported by the facts, ASIC does have a strong case against the Cassimatises because they did not act in good faith despite what they claim. ASIC’s failure to recognize this at the time does not mitigate the Cassimatises’ actions or excuse them. Storm Financial not only breached its obligations under the Corporations Act to its clients, but also breached its contractual commitments to those clients as well. However, we are dealing with breaches under the Act so I’ll ignore the contractual issues because they are not relevant to ASIC’s case.
ASIC asserts that the two executive directors breached their duties by allowing Storm to break the law governing financial planners. In fact, ASIC was the one that allowed Storm to breach the Corporations Act but this is immaterial. The Cassimatises are the ones in the dock although ASIC should, in my opinion, be standing beside them rather than be prosecuting them. In a perfect world, this would be so but this is not a fair and perfect world as we all know.
ASIC alleges that “Storm provided ‘commoditised' financial advice’ that was not tailored to each client's needs, provided false and misleading information in statements of advice to clients, and provided negligent advice”.
I have perused the Corporations Act for possible breaches and have come up with the following sections that the directors of Storm Financial have contravened:
The CORPORATIONS ACT 2001 - SECT 766B - Meaning of financial product advice.
“ (1) For the purposes of this Chapter, financial product advice means a recommendation or a statement of opinion, or a report of either of those things, that:
(a) is intended to influence a person or persons in making a decision in relation to a particular financial product or class of financial products, or an interest in a particular financial product or class of financial products; or
(b) could reasonably be regarded as being intended to have such an influence.”
945A Requirement to have a reasonable basis for the advice (1) The providing entity must only provide the advice to the client if: (a) the providing entity: (i) determines the relevant personal circumstances in relation to giving the advice; and (ii) makes reasonable inquiries in relation to those personal circumstances; and (b) having regard to information obtained from the client in relation to those personal circumstances, the providing entity has given such consideration to, and conducted such investigation of, the subject matter of the advice as is reasonable in all of the circumstances; and (c) the advice is appropriate to the client, having regard to that consideration and investigation.”
949A General advice provided to retail client—obligation to warn client that advice does not take account of client’s objectives, financial situation or needs
952B Definitions (1) In this Subdivision: defective, in relation to a disclosure document or statement, means: (a) if the disclosure document or statement is a Financial Services Guide, a Supplementary Financial Services Guide, or is information or a statement required by subsection 941C(5), 941C(7) or 941D(2): (i) there is a misleading or deceptive statement in the disclosure document or statement; or (ii) if it is a Financial Services Guide—there is an omission from the Financial Services Guide of material required by section 942B or 942C; or (iii) if it is a Supplementary Financial Services Guide that is given for the purposes of paragraph 941F(d)—there is an omission from the Supplementary Financial Services Guide of material required by that paragraph; or (iv) if it is information or a statement required by subsection 941C(5), 941C(7) or 941D(2)—there is an omission from the document or statement of material required by that subsection; being a statement, or an omission, that is or would be materially adverse from the point of view of a reasonable person considering whether to proceed to be provided with the financial service concerned; or
(b) if the disclosure document or statement is a Statement of Advice, or is information or a statement required by subsection 946B(3), 946B(6) or 946C(2): (i) there is a misleading or deceptive statement in the disclosure document or statement; or (ii) if it is a Statement of Advice—there is an omission from the Statement of advice of material required by section 947B, 947C or 947D; or (iii) if it is information or a statement required by subsection 946B(3), 946B(6) or 946C(2)—there is an omission from the information or statement of material required by that subsection or section; being a statement, or an omission, that is or would be materially adverse from the point of view of a reasonable person considering whether to act in reliance on the advice concerned.”
The basic Statement of Advice (SOA) given to Storm’s clients was a blanket one (a one-fit for all plan) that did not take into consideration the individual needs of Storm’s clients, but rather was a template model that served Storm’s needs before that of its clientele. Further, the plan was a ‘high risk’ one despite the fact that Storm’s clients were assured that it was a ‘low risk’ plan with a “7 to 10 years return on their investments.”
“It is my opinion that the level of risk tolerance required of a person being asked to embark on a gearing strategy using their primary residence as collateral whilst also borrowing funds and securing that loan against the assets being invested into (in this case unlisted index funds) is such that fewer than 1 % of the population would be considered a suitable "fit".
[Worrells’ Report to Storm’s Creditors 25th May 2010 (Page 41)]
Storm’s strategy was to turn all its clients’ liquid assets into cash in order to purchase shares and take out housing and margin loans to further boost their share portfolios. It didn’t matter whether the clients could financially support such loans. All Storm cared about was maximising its profits, and its clients were placed in harm’s way as a consequence. Because Storm had no contingency plans when the global financial Crisis occurred in late 2008, its clients suffered horrendous losses.
Of course, the Banks went along with Storm’s ‘modus operandi’ because they were just as unscrupulous, and had no qualms about extending loans even though they violated their codes of banking in so doing.
The Cassimatises claim that they were merely working within the framework of the Law, and as such, they shouldn’t be punished. Certainly, if this were so, they would have a right to feel aggrieved. After all, if one could sue every time financial advisors in good faith gave out bad financial advice, the courts would be packed to overflowing. No! There was something more in the mix here. The advice Storm gave its clients was based on deception and that is a different thing altogether.
Storm’s SOA’s were full of inaccuracies, outright lies, and inconsistencies. One of the most deceitful deceptions was Storm’s contention that it had safeguards in place whereby if certain trigger-points were activated, its clients’ interests would be protected. Not only was Storm’s system flawed, but Storm also compounded the situation by ignoring the warning signs that were prevalent in the market place at that time. Storm together with the banks left the clients ‘hanging out to dry’ until it was all too late. The result was catastrophic for the Storm investors involved.
If it were left up to the many ex-Storm clients that lost their life savings in Storm, we would all take the Cassimatises out and hang them from the nearest tree. It’s called summary justice. However, because we live in a civilized world, we must let the wheels of justice take their course even though we may all be dead by the time justice decides to make an appearance.
Think on this! The evidence of Storm’s perfidy is so overwhelming that the Cassimatises’ guilt should be a formality and yet they are only now going on trial?
On 21 December 2010 ASIC (as Applicant) began legal action in the Federal Court of Australia (Brisbane) against the executive directors of Storm Financial Limited(Receiver and Manager Appointed)(In Liquidation)(“Storm”), Emmanuel and Julie Cassimatis (as Respondents).”
Court appearances to date:
4 February 2011, 24 February 2011, 14 and 15 June 2011, 18 July 2011, 1 August 2011, 30 November 2011, 16 February 2012, 15 May 2012, 7 June 2012, 19 September 2012, 28 June 2013, 24 July 2013, 10 September 2013, 4 October 2013, 20 November 2013, 22 May 2014, 18 July 2014, 7 and 10 November 2014, 16 March 2015, 1 May 2015, 3 June 2015, 15 July 2015, 26 August 2015, 28 October 2015, 15 January 2016, 19 February 2016, 3 March 2016, 22 April 2016, 18 May 2016, 30 May 2016.
32 court appearances in all.
They say that the wheels of justice are slow but in this case they are frigging in reverse. To start with, who is paying for all this? Secondly, why, if the case against the Cassimatises is so strong, are they only now being tried?
Let’s draw an analogy between the collapse of Storm Financial and a building collapse. In the latter case, there are three parties that one looks to for answers. The architect (in this case, Storm), the construction firm that supplied the materials (in this case, the banks), and the ones that were responsible for ensuring that the buildings codes were followed (in this case, ASIC).
It makes no sense, whatsoever, to leave the architect who designed the plan until last because he should be the first cab off the rank. So, why has Storm been left until last in this case? I’ll tell you why! Because ASIC is covering its backside. It’s now in a position to prosecute Storm because Storm’s clients and the banks involved have been ‘done and dusted’. No one’s left to ask the awkward questions and public interest is now almost non-existent. A conspiracy perhaps or have I been listening to too many conspiracy nuts that park themselves outside the book depository?
For those that think the Cassimatises will finally get their just deserts, think again. This is a civil trial so there will be no prison time. The Cassimatises will merely pay the fines levied with the money they pinched from us, and probably will be free at some time in the future to do this all over again. Were the Cassimatises merely negligent or were they reckless, and if so, to what extent?
“Negligence and recklessness have different meanings when it comes to the law. There is no definition of recklessness, but if there were a spectrum with intent at the top end and negligence at the bottom, recklessness would fit somewhere in the middle. So while it falls short of intent, it implies a more serious level of culpability than mere negligence. And recklessness is most certainly an important part of criminal law.”
Should such people be tried under the Crimes Act or be allowed to escape the full weight of the Law through civil proceedings? After all, how many lives have they destroyed financially and how many suicides have they caused?
Whilst this legal idiocy remains, Justice will always be for the rich and the poor will just get poorer and ultimately perish. The theme is nothing new! Just the names of the victims change.
FRANK AINSLIE – 30th June 2016
OUTSTANDING AUTHOR OF:
‘I ACCUSE’ - https://sites.google.com/site/stormingonbanks/the-government/attorney-general
‘THE BANK OF QUEENSLAND SCANDAL’ - https://sites.google.com/site/boqnorthward/
‘PLAUSIBLE DENIABILITY’ - https://sites.google.com/site/stormingonbanks/home/our-company
‘THE THIRD SECRET’ - https://sites.google.com/site/thethirdsecret/
‘IS THE LAW AN ASS?’ - https://bankvictims.com.au/general-banking-news/item/11769-is-the-law-an-ass-or-the-people-that-administer-it
'ROYAL COMMISSION INTO BANKING - A VOTE CHANGER' - https://bankvictims.com.au/index.php/general-banking-news/item/11796-royal-commission-into-banking-a-vote-changer
'THE BANKING CODES PROVE THAT SELF-REGULATION DOESN'T WORK!' - https://bankvictims.com.au/index.php/general-banking-news/item/11770-the-banking-codes-prove-that-self-regulation-doesn-t-work
'ASIC'S FLAWED POLICY CONTINUES TO PUT THOUSANDS OF INVESTORS AT RISK'? - https://bankvictims.com.au/index.php/regulators/item/11803-asic-s-flawed-policy-continues-to-put-thousands-of-investors-at-risk