Part I ' ASIC liable for  gagging' compensation

Reporter: Tricia Takanawa / Jimmy Olsen

Content : ASIC & Storm, Storm gagging, Hugh Copley profile, ASIC Enforceable Undertaking, ASIC & CBA compensation, Tony D’Aloisio profile

Tuesday 15th May 2012

This article follows on from our previous story “Was Storm gagged by ASIC: A reality, not a myth” where we discussed the justification ASIC used for gagging Storm.  The article will delve deeper into ASIC actions in Dec 08 and includes various ASIC emails proving the gagging of Storm.  Due to the excessive length of the article it will be delivered in 3 parts.



Since December 2008 ASIC has denied that it had forced any undertaking from Storm including blatant denials by the then head of ASIC Tony D'Aloisio to the PJC Inquiry.  In December 2008 in discussions with ASIC, Emmanuel & Julie Cassimatis were presented for the first time with a document, authored by ASIC, that purported to represent a ‘draft’ enforceable undertaking (EU) that Storm offered to make.  The Cassimatis' claim that no such  offering' was made by Storm and in fact they were coerced and pressured to sign the ASIC document there and then but refused to do so.  Our source within ASIC has informed The Plain Truth that the precise dates that the EU demanded by ASIC were presented to the Cassimatis' were 16th and 17th Dec for Emmanuel and Julie respectively.  Section 5 of this  draft' EU contained among other things a requirement that  Storm and its representatives not engage with and/or provide financial services to any of Storm's clients in relation to or in connection with any geared investments (includes debt and assets) for a period of over 1 yr'.

Clearly had the Cassimatis' formalised this undertaking by signing, it would have eventually rendered Storm insolvent given that Storm would have been prevented in doing business with most of their clients by volume of business.  We understand that although Storm had approximately 14,000 clients overall, something like 90% of Storms revenue was derived from approximately the 3,000 clients who would have been subjected to this undertaking.

Therefore if ASIC's statement that the Cassimatis' offered this  draft' undertaking is to be believed, then firstly the Cassimatis' would have signed it, which they did not, secondly it would have resulted in financial suicide for Storm, which the directors dutifully resisted and thirdly subsequent emails between Storm and ASIC definitively illustrate Storm's unwillingness to agree to even a 3 month undertaking let alone a 12 month undertaking as ASIC claims was supposedly  offered' by Storm.  The only conclusion that can be drawn is – ASIC wanted the undertaking and not Storm.

ASIC has claimed and continues to claim that Storm was not gagged.  ASIC points to the fact that the  draft' document created by ASIC was never signed by Storm or the Cassimatis' and accordingly ' there was never an Enforceable Undertaking.  ASIC conveniently hides emails that unequivocally prove that ASIC extracted an undertaking from Storm. The Plain Truth has published these emails below.  The questions now remaining are how to explain the fact that there WAS an undertaking eventually extracted from the Cassimatis', how this was done and what the undertaking was…

Storm did not sign the proposed Enforceable Undertaking (EU) drafted by ASIC, accordingly that undertaking had no effect. The real damage occurred to the CBA victims / Storm clients and Storm itself when ASIC was able to force a short-term undertaking from Storm to  not engage' with clients along the same lines as their prepared written undertaking.  This short term undertaking was put in place by ASIC until the final terms of the full EU had been agreed to by both ASIC and Storm (in any event ultimately no agreement was reached).  The short term gagging was reluctantly agreed to by Storm in a desperate bid to allow them to obtain a sensible undertaking from ASIC which would not result in ASIC forcing Storm into administration.  Consequently a window of opportunity was created by ASIC that allowed the CBA, with this help of ASIC, to lay blame at the feet of Storm.  At the same time Storm, its advisors and servants were unable to respond to clients' plea's for help due to ASICs underhanded and seemingly innocuous short-term, interim gag that eventually became a permanent and fatal gag.

On the 17th Dec 08 CBA dispatched a letter to its victims (i.e. Storm clients) misleadingly advising them that Storm is “completely responsible for your financial position and any advice they might offer to you regarding that position”.  This letter from CBA was designed to arrive in their victims letterboxes during the gagging period.

Thursday 18 December 2008 @ 7.51pm

Whilst Storm was resisting the inevitable consequences that would flow from the signing of the EU as proposed, ASIC extracted an  interim' undertaking which is obvious in the below email from Hugh Copley to Justin McDonald (Storms lawyer).  It was this seemingly harmless  interim' undertaking, forcefully imposed by ASIC that ultimately led to the demise of Storm and the destruction of Storm clients.  It is this loss causing  gag' action by ASIC which will require ASIC to compensate Storm clients for a significant proportion of their losses.

Friday 19 December 2008 @ 6.13pm

As can be seen in the following email and attachment, which speak for themselves, it is evident that ASIC is force-feeding Storm at a time when ASIC is claiming that Storm was  volunteering' to gag itself.

ASIC was so confident in its arrogance that Storm would succumb to its demands for a fatal EU, that ASIC went so far as to draft on Storms behalf a letter to Storms clients and had even at this time negotiated with the Financial Planning Association of Australia (FPA) to distribute out Storm clients to alternate advisors.

Very important note ' This collusion by ASIC with the FPA coincides with CBA's offer in its letter dated 17 Dec 08 to pay for a 1hr consultation for Storm clients with the alternate advisor that ASIC wanted.

Extract from CBA letter to Storm clients dated 17th Dec 08

Saturday 20 December 08 @ 4.04pm

Email from Julie Cassimatis to Storm lawyer highlighting concerns over ASIC timeframes.

Shown here is the enormous pressure ASIC applied to Storm.  There was insufficient time given by ASIC for Storm to consider a highly complex document that would result in not only the destruction of 3,000 clients but also a $500M company.

This email contains statements that clearly show:

-          ASIC demand the EU and was not  offered' by Storm as ASIC is trying to portray

-          At this time the EU was still in draft phase and not yet finalised

-          ASIC successfully demanded and got an interim undertaking using the hook that this undertaking was for a short time only.


To be continued…

 PART II will be published Thursday 17th May 2012


Content : ASIC & Storm, Storm gagging, Hugh Copley profile, ASIC Enforceable Undertaking, ASIC & CBA compensation, Tony D’Aloisio profile

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