Storm founders got $2 million payment as company headed for disaster, court told

Julie Cassimatis, co-founder of collapsed financial advice company Storm Financial, transferred $2 million to her personal bank account even after she was warned the company was in serious financial trouble, the Federal Court in Brisbane has heard.

Storm’s former co-chief financial officer, Mark Barrett, appeared in the Federal Court as part of public examination into the company’s collapse.

Barrett said the company’s financial position deteriorated sharply in late 2008 as global sharemarket tumbled. By early December, Barrett said he had concerns about the solvency of the company and several meetings were held to discuss Storm’s position.

On December 13, he said he emailed Julie Cassimatis, who founded the company with husband Emmanuel Cassimatis, attaching a “paper on insolvency” that she had requested.

Two days later, Julie Cassimatis requested the $2 million payment to be made, claiming this was part of a $10 million dividend the Cassimatis couple was to receive when Storm listed on the Australian Securities Exchange.

Barrett said he questioned this rationale with law firm Mallesons, which said there was no legal basis for the payment because a float had not occurred.

Barrett told the court he thought the payments to Cassimatis may have made the company insolvent.

The public examination continues today.