media release (18-081MR)

Directors of Storm Financial penalised for breach of duties


The Federal Court has imposed civil penalties of $70,000 each on the directors of Storm Financial, Emmanuel and Julie Cassimatis, who were previously found by the Court to have breached their duties as directors (refer: 16-277MR). They were also disqualified from managing corporations for seven years.

This draws to a close ASIC's Storm-related litigation, which has included investors receiving compensation in relation to losses suffered on investments made through Storm. 

Storm Financial operated a system of advice, created by the Cassimatises, in which 'Stormified' clients were advised to invest substantial amounts in index funds, using 'double gearing' (Storm Model).  Clients would usually take out a home loan and a margin loan in order to purchase units in index funds, create a 'cash dam' and pay Storm's fees.  Clients were then encouraged to take 'step' investments over time. In late 2008 and early 2009, many of Storm's clients were in negative equity positions, sustaining significant losses. 

In the original judgment, Justice Edelman had found that a sample of investors who were advised to invest in accordance with the Storm Model, received advice that was inappropriate to their personal circumstances. Each of those investors were over 50 years old, were retired or approaching and planning for retirement, had little or limited income, few assets and had little or no prospect of rebuilding their financial position in the event of suffering significant loss.

Justice Edelman found that the Cassimatises had each engaged in a course of conduct which amounted to one breach of the requirement that they exercise their powers as directors with the degree of care and diligence that a reasonable person would have exercised in that situation. he maximum penalty for a breach of directors' duties (s180) is $200,000.

Download the judgment


ASIC commenced this civil penalty proceeding against the Cassimatises in late 2010 (refer: 13-158MR). The trial took place between 30 May and 30 June 2016.  In August 2016, Edelman J handed down judgment in relation to liability against the Cassimatises, finding that they had each breached their duties as directors (refer: 16-277MR).

[This MR was redacted on 09/09/2022 in accordance with ASIC policy - see INFO 152 Public comment on ASIC's regulatory activities.]

In May 2013 ASIC secured $1.1 million in compensation on behalf of two former Storm investors, Barry and Deanna Doyle (refer 13-122MR).

In May 2013, ASIC intervened in the application for Court approval of the settlement of the related class action brought against Macquarie Bank in respect of Storm as it had concerns about the fairness of the settlement arrangements.  On 12 August 2013, the Full Federal Court agreed that the distribution of the settlement sum was not fair and reasonable to all group members (refer:  Under a revised settlement, Macquarie Bank agreed to pay $82.5 million by way of compensation and costs (refer 14-244MR).

In September 2014, ASIC entered into a settlement agreement with the Bank of Queensland Limited to pay approximately $17 million as compensation for losses suffered on investments made through Storm (refer 14-244MR).

Editor's note:

On 29 March 2018, the parties appeared before Dowsett J to formalise the penalty and costs orders.

Editor's note 2:

On 19 April 2018, the respondents filed a notice of appeal in relation to the liability and penalty judgments.

Editor's note 3:

The appeal by Mr and Mrs Cassimatis is listed for a case management hearing before Justice Greenwood in Brisbane on 4 September 2018.

Editor's note 4:

A further case management hearing has been set for 27 September 2018.

Editor's note 5:

A further case management hearing has been set for 8 October 2018.

Editor's note 6:

A case management hearing has been re-listed for 24 October 2018.

Editor's note 7:

The case management hearing was relisted for 29 October 2018 and subsequently further adjourned to 1 November 2018.

Editor’s Note 8:

On 1 November 2018, His Honour Justice Greenwood listed the appeal to be heard in the February 2019 sittings of the Full Court and Appellate.

Editor's note 9:

The appeal has been listed on 20 and 21 February 2019 before the Federal Court of Australia at Brisbane.

Editor's note 10:

Mr and Mrs Cassimatises’ appeal against the judgment was heard on 20 and 21 February 2019 before the Federal Court. The Court has reserved its judgment.


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