Corporate regulator ASIC restricted advisers within the Storm Financial (Storm) network from engaging with their clients just weeks before the firm’s collapse, Storm Investors Consumer Action Group (SICAG) co-chairman Mark Weir has claimed.
After much speculation over why Storm advisers supposedly went to ground during December and January, SICAG was informed last month by an ASIC representative that the regulator had enforced a restriction on Storm advisers.
“The reason for this prohibition was that ASIC had become aware that Storm were advising their clients not to pay their negative equity debt to Colonial, and it was their considered opinion that this could be of further detriment to their circumstances through having interest accrue on the debt,” Weir said.
“At a time when contact with their advisers was of paramount importance, they were victimised by default. Furthermore, I have not heard of anyone who was advised not to pay their debt.
“They might have been told to get a complete reconciliation before paying it and in any event most clients could not have paid it even if they had wanted to – and still can’t.”
The decision to go public on this claim was made in a bid to clear up confusion over the actions of the financial advisers, Weir said.
“It should be made clear that it has been confirmed that contravention of this restriction would have resulted in severe sanctions being imposed by ASIC on any adviser found in breach of this directive,” he said.
ASIC refused to comment.
