In Australian Securities and Investments Commission v Cassimatis (No 8)1, Justice Edelman of the Federal Court found that the directors of Storm Financial (Emmanuel and Julie Cassimatis) had contravened their duty of care and diligence under s 180(1) of the Corporations Act 2001 (Corporations Act) by allowing Storm Financial to provide the ‘Storm model’ of financial advice to investors who were particularly vulnerable financially.
In doing so, the directors caused or allowed Storm to contravene ss 945A and 912 of the Act and exposed Storm to the risk of losing its Australian Financial Services Licence (AFSL). Any reasonable director would have taken this risk extremely seriously, which Mr and Mrs Cassimatis failed to do.