The corporate watchdog says it plans to begin legal action against several banks to seek compensation for investors after the collapse of Storm Financial Ltd.

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The Townsville-based financial services firm collapsed in 2008 at the height of the global financial crisis, owing millions of dollars to investors. Among the banks ASIC is pursuing are Commonwealth Bank of Australia Ltd (CBA), Bank of Queensland Ltd (BoQ) and Macquarie Bank Ltd (MBL).

The Australian Securities and Investments Commission (ASIC) said the compensation action would not be filed immediately, so parties had up to three more weeks for commercial talks.

Chairman Tony D’Aloisio said ASIC had been unable to agree on an acceptable commercial compensation with key parties which ASIC had been prepared to recommend to investors.

“In the circumstances, it was not possible for ASIC to continue to defer the decision to commence legal proceedings,” Mr D’Aloisio said in a statement on Friday.

“However, ASIC remains of the view that a commercial resolution is the preferable course.

“The compensation actions we have decided to bring are complex, but we consider that it is in the public interest for ASIC to assist retail investors by bringing these actions.”

ASIC said it was also starting civil proceedings against Emmanuel and Julie Cassimatis as directors of Storm Financial.

“In addition to seeking compensation for investors, ASIC is pursuing regulatory outcomes in relation to those who implemented the Storm Model,” Mr D’Alosio said. The regulator alleges the Cassimatises breached their duty as directors by causing and permitting Storm to be exposed to legal liability from its financial services model.

ASIC also said the conduct of the Storm model amounted to the operation of a managed investment scheme that was required to be registered under the Corporations Act, but was not registered.

“It will be alleged that CBA, BoQ and MBL participated in the operation of that scheme,” it said.

The Commonwealth Bank said it was committed to commercial discussions with ASIC, but would “strongly” defend its position in court.

“However, it is disappointed that despite ASIC’s public statement that a commercial resolution is the preferable course and that meaningful discussions have been continuing, it may choose instead to commence legal proceedings which will only create further uncertainty for former Storm Financial investors,” Commonwealth said in a statement.

Law firm Slater & Gordon, which acts for many Storm Financial victims, said it had always asserted an industry-wide approach to fixing the problems for many former Storm clients was best through ASIC.

“It is important to remember that Slater & Gordon clients who have settled claims against the CBA and any other bank have the benefit of an ASIC carve out provision in their settlement agreements,” Slater & Gordon spokesman Damian Scattini said.

“This provision provides that any client who has settled their claim as part of the resolution scheme is able to receive further compensation if ASIC achieves a better result, by negotiation or litigation.”

Bank of Queensland and Macquarie also said they were disappointed with ASIC’s action after working with the regulator for more than a year.

“However, we will continue to act in good faith in our negotiations with ASIC and will of course continue to work one-on-one with BoQ customers who have suffered as a result of Storm’s collapse to provide assistance,” Bank of Queensland said in a statement.

Macquarie said the bank had undertaken an internal review regarding Storm over the past two years.

“Macquarie’s review confirmed that its conduct, together with that of its staff, has been ethical, lawful and professional,” the bank said.