Caught in a Storm

The founder of collapsed financial planning group Storm Financial, Emmanuel Cassimatis, finally took to the witness box yesterday to face public examination in the Federal Court in Brisbane.

According to news reports of his evidence, the most exciting exchanges related to the private jet that Cassimatis bought in 2007, when Storm was flying high on the boom market.

Asked why he bought the jet, Cassimatis replied: “Because I wanted a jet…It’s been a long-term goal of mine to acquire a jet.”

The jet story makes for a (sadly) funny comment on the way Storm was run, but it wasn’t the most interesting thing to come out yesterday.

What was truly amazing were revelations that Cassimatis wrote to the Queensland Government on 17 October 2008, proposing a financial assistance package to help his struggling firm.

A month later, he wrote to the Federal Financial Services Minister, Chris Bowen, requesting his help.

In both cases the assistance was denied, which is fair enough. But the revelations leave me with one big question – did these letters, which showed the company with thousands of clients and billions of dollars in serious trouble, set of an alarm bells in these government offices?

On the surface at least, it would appear not. Storm went down in January 2009, almost three months after that first letter. Plenty of time, you would think, for either government office to pass the letters on to ASIC and politely suggest that it take a look at Storm’s model.

But there has been no suggestion this happen. Storm investors are entitled to ask: why?