Former Storm Financial clients offered lowest rates
A COMMONWEALTH Bank subsidiary agreed to provide the lowest marginal lending rate to customers of now disgraced investment institution Storm Financial.
Former advisor David McCulloch gave evidence in the Federal Court on Tuesday during a trial where the Australian Securities and Investments Commission is alleging Storm Financial ran an unregistered investment scheme.
Documents shown to the court revealed Storm Financial approached various lending institutions with its proposed business model in the early 2000s.
Mr McCulloch said he sighted a letter from Colonial Margin Lending - a CBA subsidiary - to either Storm Financial or company founder Julie Cassimatis about the terms and conditions of Storm's arrangement with the lending institution.
"I only recall one paragraph," he said.
"Words to the effect, Colonial Margin Lending does guarantee to Storm it will offer Storm clients the lowest marginal lending interest rates in the country."
ASIC alleges the Bank of Queensland and Macquarie Bank supported Storm's unregistered managed investment scheme.
ASIC, which recently settled in a similar action against the CBA, has calculated investors lost about $830 million after Storm's collapse.
