Australia’s Commonwealth Bank Group said it would increase compensation to investors by $136 million to investors who lost money entrusted to the Storm Financial Company operated by Emmanuel and Julie Cassimatis.
The agreement came after a deal brokered with the Australian Securities and Investments Commission (ASIC) which launched civil penalty proceedings in federal court against the firm which collapsed in 2009, alleging the pair had breached their duties.
In a defence document, the Cassimatis’ wrote that ASIC officials ”visited Storm’s premises and conducted reviews and audits on numerous occasions from 1993 to 2008” without raising concerns.
In total, CBA’s customers will get compensation of about 55% of their losses, taking into consideration a previous compensation announced by the bank officials.
“We are pleased to have reached an agreement with ASIC on this matter as it is in the best interests of our customers to avoid lengthy and uncertain litigation,” David Cohen, the bank’s group General Counsel, said. ASIC chairman Greg Medcraft said at a news conference that, “It’s s one of the largest settlements every achieved for investors.Its timely and fair. Rather than have lengthy court case – many of investors are elderly – it does not put them through the strain of a long court battle.”
ASIC will continue the proceedings against Cassimatis’ Storm, which are scheduled to start on Sept. 17, 2012. ASIC estimates the total loss suffered by all investors who borrowed monies from banks to invest through Storm to be approximately $830 million.
(Source: propertyobserver.com.au, The Sydney Morning Herald)