This name remained intact until 1 February 2004 when it was relinquished consequent to trademark objections from the Nasdaq stock exchange in the United States.
Storm Financial Ltd continued to trade until external administrator Worrells Solvency and Forensic Accountants were appointed on 9 January 2009.
[6] In addition to gaining efficiencies by commoditising the packaging of its advice in Storm's back office, Storm Financial used its large flow of funds to obtain significant discounts in fees charged by financial product manufacturers such as fund managers and Margin Lenders.
The alternative option had a nil upfront fee component with higher ongoing trail commissions, similar to traditional financial advice models.
[4][7] Storm's Statement of Advice indicated that, on average, the cost of the two fee options to the client converged after a period of approximately four and a half years.
On 12 December 2008, after having discussions with the Commonwealth Bank,[9] the Australian Securities & Investments Commission (ASIC) began investigations on Storm Financial's advice to its clients.
1 October 1993 Storm queries the ASC re upcoming regulations Evidence emerged from as early as 1 October 1993 when Storm's (then Emmanuel Cassimatis & Assoc Pty Ltd[1] ) CEO and managing director Emmanuel Cassimatis demonstrated a diligent approach in complying with the upcoming Australian Securities Commission's (as ASIC was known at the time) regulations when he wrote to the ASC to express concern and receive clarification about pending regulatory changes.
[16] Storm responded in a letter dated 17 January 1996 with detailed annexures replying in full and answering all matters of concern to the ASC.
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.
[24] Whilst in the past the Commonwealth Bank sent margin call notices out to Storm clients, the advisor or both,[25] the bank's failure to issue margin call notices at the critical time was one of the major influences in late 2008 that triggered the eventual collapse of Storm.
The lack of information meant that clients were unable to transact on their portfolios with confidence consequently resulting in significant losses.
[34] Material elements of CBA's letter of 9 December 2008 was also found to be deceptive and misleading by the Federal Court of Australia.
[35] Once again, the Federal Court of Australia found to the standard of proof for interlocutory injunction that the assertions by the Commonwealth Bank were deceptive and misleading.
On 12 December 2008, the Australian Securities & Investments Commission began investigation of Storm Financial's margin lending and related advice.
[37] High-profile victims of the collapse include Australian cricketer Andrew Symonds, estimated to have lost approximately A$1.5 million in the company's failure.
Former professional rugby league footballer Wally Fullerton Smith, an advisor working with Storm, lost his home and business.
Other reforms included instituting a statutory fiduciary duty so that financial advisers must act in the best interests of their clients, and increasing the powers of the corporate regulator; the Australian Securities & Investments Commission.
In July 2010, Sydney-based lawyer Stewart Levitt of law firm Levitt Robinson filed a class-action lawsuit against the Commonwealth Bank of Australia alleging that, in its dealings with Storm Financial's investors, the bank's subsidiary Colonial First State was running an illegal unregistered Managed Investment Scheme and had engaged in misleading and deceptive trade conduct.
[47] This was followed by a series of other class actions on behalf of Storm Financial investors against several other Australian banks, including ANZ, Westpac, Bankwest, and most notably, Macquarie Bank—which, in March 2013, settled the lawsuit brought by investors advised by Storm Financial and who had Macquarie margin loan facilities for $82.5 million.